Basu govt's AMRI sweet deal

Calcutta, Dec. 13: The Jyoti Basu government had handed over the Dhakuria land to AMRI in an unusual deal that locked the annual lease rent at Rs 9.94 lakh ' 16 times less than the current market lease rate.
Few lease agreements freeze the rent for more than five years. But AMRI Hospitals, Dhakuria, was allowed a flat rate of Rs 6.40 lakh for one parcel of land and Rs 3.54 lakh for another for a long period of 30 years.
The deals for 81.55 cottahs were struck in 1994 and 1998, when Basu was chief minister. This means AMRI needs to pay only Rs 9.94 lakh for the two plots ' one of which houses the annexe in which 90 people choked to death ' till at least the year 2024. The current market lease rent itself works out to Rs 1.63 crore, against which AMRI is paying less than Rs 10 lakh now.
Another inexplicable element: the higher Rs 6.40 lakh had been set for the smaller parcel (27.55 cottahs where the main building is located) in 1994. The bigger chunk (54 cottahs that house annexe I and II) was given away for a lease rent of Rs 3.54 lakh four years later.
The 1994 deal more or less stuck to the then market lease rent (Rs 6.88 lakh). But the 1998 agreement ' even after giving some allowance that the plot was not by the roadside ' was as sweet as it could get because the market rate then was Rs 13.5 lakh or nearly Rs 10 lakh more than what the government asked AMRI to fork out.
But the most confounding feature of the agreement is the flat lease rate for 30 years, which goes against the normal practice of revising the rates at regular intervals.
The Singur lease the Left government ' by then the baton had passed to Buddhadeb Bhattacharjee ' had agreed upon with the Tatas, who had to be wooed assiduously in the face of intense competition from other states, had a clause to revise the rate after the initial five years.
The startling revelations on the AMRI land deal have been thrown up by an internal audit conducted by the finance department in November.
The then government may have had some justification initially as the hospital was conceived as a joint sector project in which the state held 26 per cent. However, by 2007, that fig leaf had also practically withered away as the government's stake had come down to 1.9 per cent.
According to filings by the company, the R.S. Goenka and R.S. Agarwal families, which own the Emami group, have a 66 per cent stake in AMRI Hospitals. The S.K. Todi family owns around 32 per cent.
"Although the Left government allowed repeated modifications in the agreement with the private promoters as its stake in the project plummeted, it never thought of revising the lease rent it charged the private promoters," said a finance department official, who was part of the team that conducted the audit.
The absence of any provision for periodic review ensured that the rent remained undisturbed while market rates soared in the prized area.
"A lease rent of around Rs 10 lakh for around 82 cottahs in an area where a cottah sells in excess of Rs 50 lakh is unheard of. The deal could not have been sweeter," said a senior official in the land and land reforms department.
According to him, if the provisions in the land reform manual are followed, the lease rent of a plot, excluding the building, should be 4 per cent of the current market value.
"Such concessional lease rents are allowed only under political compulsions," said another official in the department.
The proximity of S.K. Todi, one of the promoters of AMRI Hospitals and a director now in police custody, with Basu was well known. Although Todi's closeness with the CPM waned since Bhattacharjee became chief minister, the Left government is not known to have made any attempt to review the hospital's lease rent.
"The decision to offer a discount would have made sense had the government either increased or retained its share in the hospital. But this is a classic case in which the government lost out on rent and sharing of profits," said a finance department official, who had studied the documents dating back to the time when AMRI Hospitals was known as Niramoy Group of Institutions.
The Left Front government had acquired it in 1991 in an attempt to provide "affordable healthcare" to the people and brought in private partners ' led by the Todis of Shrachi Group ' in 1994.

Do you think Jyoti Basu was being philanthropic when he gave away the plot almost free?
I think it was Chanakya who said that nobody does anything for free.
There is always a price.
Jyotida must have got a good sum from the Todis, Goenkas and Agarwals.
After all he used to go quite often to UK for "treatment".
Wonder why nobody has investigated the Swiss angle for Jyotida?